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Nordson Corporation’s (NDSN - Free Report) first-quarter fiscal 2024 (ended Jan 31, 2024) adjusted earnings of $2.21 per share surpassed the Zacks Consensus Estimate of $2.03. The bottom line increased 13.3% year over year.
Revenue Details
In the reported quarter, Nordson’s revenues were $633.2 million, up 3.7% from the year-ago quarter’s number due to solid momentum in the Industrial Precision Solutions and Medical and Fluid Solutions segments. The top line beat the Zacks Consensus Estimate of $630 million.
Organic sales declined 2.2% year over year due to softness in electronics product lines. Acquisitions/divestitures had a positive impact of 5.4% while foreign currency translation had a positive impact of 0.5%.
On a regional basis, revenues from the Asia Pacific region decreased 1.5% year over year to $179.9 million. Revenues generated from Europe increased 10% to $179.3 million while the metric in the Americas increased 3.4% to $274 million.
Nordson started reporting revenues under three segments effective Aug 1, 2022. The segments are Industrial Precision Solutions, Medical and Fluid Solutions, and Advanced Technology Solutions. A brief snapshot of the segmental sales is provided below:
Revenues from Industrial Precision Solutions amounted to $354.5 million in the quarter under review, up 13.8% from the year-ago fiscal quarter’s level. The segment contributed 56% to NDSN’s top line in the quarter.
Organic sales increased 2.3% from the year-ago fiscal quarter’s level. Foreign currency translation had a positive impact of 0.9%.
Revenues from Medical and Fluid Solutions amounted to $159.5 million in the quarter under review, up 3.4% from the year-ago fiscal quarter’s level. The segment contributed 25.2% to NDSN’s top line in the reported quarter.
Organic sales increased 3.1% from the year-ago fiscal quarter’s level. Foreign currency translation had a positive impact of 0.3%.
Advanced Technology Solutions’ sales were $119.1 million, down 17.6% from the year-ago fiscal quarter’s figure. The metric represented 18.8% of Nordson’s revenues in the period.
Organic sales decreased 17.6% from the year-ago fiscal quarter’s level.
Nordson Corporation Price, Consensus and EPS Surprise
In the reported quarter, Nordson’s cost of sales increased 1.1% from the year-ago fiscal quarter’s level to $284.8 million. Gross profit was $348.4 million, up 6% from the year-ago fiscal quarter’s level. The gross margin increased 110 basis points (bps) to 55%.
Selling and administrative expenses increased 2.4% year over year to $189 million. EBITDA was $197 million, the margin being 31%. Operating income in the reported quarter was $159.4 million, increasing 10.6% year on year. The adjusted operating margin of 25.2% increased 160 bps from the year-ago period.
Net interest expenses totaled $20.4 million, reflecting a 105.2% increase from the year-ago fiscal quarter’s level.
Balance Sheet & Cash Flow
At the time of exiting the first quarter of fiscal 2024, Nordson’s cash and cash equivalents were $136.2 million compared with $115.7 million recorded at the end of the fourth quarter of fiscal 2023. Long-term debt was $1.5 billion compared with $1.6 million recorded at the end of the fourth quarter of fiscal 2023.
In the first three months of fiscal 2024, NDSN generated net cash of $172.4 million from operating activities, up 39.7% from the last fiscal year’s tally. Capital invested in purchasing property, plant and equipment totaled $7.5 million, decreasing 19.1% from the year-ago fiscal period.
Nordson’s treasury purchase shares amounted to $7.4 million in the first three months of fiscal 2024, increasing from $6.9 million in the last fiscal year.
Outlook
For the second quarter of fiscal 2024, NDSN expects sales in the range of $645-$670 million and adjusted earnings in the band of $2.20-$2.35 per share.
For fiscal 2024 (ending October 2024), Nordson anticipates adjusted earnings of $10.00-$10.50 per share. The Zacks Consensus Estimate for the same is $10.08 per share. Sales are expected to increase 4-7% from the previous fiscal year’s reported number.
Performance of Other Industrial Companies
Tetra Tech, Inc. (TTEK - Free Report) reported first-quarter fiscal 2024 (ended Dec 31, 2023) adjusted earnings of $1.40 per share, which surpassed the Zacks Consensus Estimate of $1.35. The bottom line surged 4.5% year over year driven by strong momentum in each of its segments.
In the fiscal first quarter, Tetra Tech generated adjusted revenues of $1.2 billion, reflecting a year-over-year increase of 37.3%. Adjusted net revenues (adjusted revenues minus subcontractor costs) were $1.0 billion, up 37.8% year over year. Tetra Tech’s revenues exceeded the consensus estimate of $974 million.
A. O. Smith Corporation’s (AOS - Free Report) fourth-quarter 2023 adjusted earnings of 97 cents per share surpassed the Zacks Consensus Estimate of 96 cents. The bottom line jumped 13% year over year, driven by the continued strong demand for residential water heaters in North America.
Net sales of $988.1 million narrowly missed the consensus estimate of $989 million. However, the top line increased 5.6% year over year.
Illinois Tool Works Inc. (ITW - Free Report) reported fourth-quarter 2023 adjusted earnings of $2.42 per share, which surpassed the Zacks Consensus Estimate of $2.40. Earnings increased 3.4% year over year.
The company’s revenues of $3.98 billion missed the consensus estimate of $4.01 billion. The top line inched up 0.3% year over year due to a favorable foreign currency translation of 1.2%. However, organic sales decreased 0.5% and divestitures reduced revenues by 0.4%.
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Nordson (NDSN) Q1 Earnings Beat Estimates, Revenues Rise Y/Y
Nordson Corporation’s (NDSN - Free Report) first-quarter fiscal 2024 (ended Jan 31, 2024) adjusted earnings of $2.21 per share surpassed the Zacks Consensus Estimate of $2.03. The bottom line increased 13.3% year over year.
Revenue Details
In the reported quarter, Nordson’s revenues were $633.2 million, up 3.7% from the year-ago quarter’s number due to solid momentum in the Industrial Precision Solutions and Medical and Fluid Solutions segments. The top line beat the Zacks Consensus Estimate of $630 million.
Organic sales declined 2.2% year over year due to softness in electronics product lines. Acquisitions/divestitures had a positive impact of 5.4% while foreign currency translation had a positive impact of 0.5%.
On a regional basis, revenues from the Asia Pacific region decreased 1.5% year over year to $179.9 million. Revenues generated from Europe increased 10% to $179.3 million while the metric in the Americas increased 3.4% to $274 million.
Nordson started reporting revenues under three segments effective Aug 1, 2022. The segments are Industrial Precision Solutions, Medical and Fluid Solutions, and Advanced Technology Solutions. A brief snapshot of the segmental sales is provided below:
Revenues from Industrial Precision Solutions amounted to $354.5 million in the quarter under review, up 13.8% from the year-ago fiscal quarter’s level. The segment contributed 56% to NDSN’s top line in the quarter.
Organic sales increased 2.3% from the year-ago fiscal quarter’s level. Foreign currency translation had a positive impact of 0.9%.
Revenues from Medical and Fluid Solutions amounted to $159.5 million in the quarter under review, up 3.4% from the year-ago fiscal quarter’s level. The segment contributed 25.2% to NDSN’s top line in the reported quarter.
Organic sales increased 3.1% from the year-ago fiscal quarter’s level. Foreign currency translation had a positive impact of 0.3%.
Advanced Technology Solutions’ sales were $119.1 million, down 17.6% from the year-ago fiscal quarter’s figure. The metric represented 18.8% of Nordson’s revenues in the period.
Organic sales decreased 17.6% from the year-ago fiscal quarter’s level.
Nordson Corporation Price, Consensus and EPS Surprise
Nordson Corporation price-consensus-eps-surprise-chart | Nordson Corporation Quote
Margin Profile
In the reported quarter, Nordson’s cost of sales increased 1.1% from the year-ago fiscal quarter’s level to $284.8 million. Gross profit was $348.4 million, up 6% from the year-ago fiscal quarter’s level. The gross margin increased 110 basis points (bps) to 55%.
Selling and administrative expenses increased 2.4% year over year to $189 million. EBITDA was $197 million, the margin being 31%. Operating income in the reported quarter was $159.4 million, increasing 10.6% year on year. The adjusted operating margin of 25.2% increased 160 bps from the year-ago period.
Net interest expenses totaled $20.4 million, reflecting a 105.2% increase from the year-ago fiscal quarter’s level.
Balance Sheet & Cash Flow
At the time of exiting the first quarter of fiscal 2024, Nordson’s cash and cash equivalents were $136.2 million compared with $115.7 million recorded at the end of the fourth quarter of fiscal 2023. Long-term debt was $1.5 billion compared with $1.6 million recorded at the end of the fourth quarter of fiscal 2023.
In the first three months of fiscal 2024, NDSN generated net cash of $172.4 million from operating activities, up 39.7% from the last fiscal year’s tally. Capital invested in purchasing property, plant and equipment totaled $7.5 million, decreasing 19.1% from the year-ago fiscal period.
Dividends/Share Buyback
In the first three months of fiscal 2024, Nordson, carrying a Zacks Rank #2 (Buy) at present, paid out dividends amounting to $38.9 million, up 4.5% from $37.2 million in the prior year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Nordson’s treasury purchase shares amounted to $7.4 million in the first three months of fiscal 2024, increasing from $6.9 million in the last fiscal year.
Outlook
For the second quarter of fiscal 2024, NDSN expects sales in the range of $645-$670 million and adjusted earnings in the band of $2.20-$2.35 per share.
For fiscal 2024 (ending October 2024), Nordson anticipates adjusted earnings of $10.00-$10.50 per share. The Zacks Consensus Estimate for the same is $10.08 per share. Sales are expected to increase 4-7% from the previous fiscal year’s reported number.
Performance of Other Industrial Companies
Tetra Tech, Inc. (TTEK - Free Report) reported first-quarter fiscal 2024 (ended Dec 31, 2023) adjusted earnings of $1.40 per share, which surpassed the Zacks Consensus Estimate of $1.35. The bottom line surged 4.5% year over year driven by strong momentum in each of its segments.
In the fiscal first quarter, Tetra Tech generated adjusted revenues of $1.2 billion, reflecting a year-over-year increase of 37.3%. Adjusted net revenues (adjusted revenues minus subcontractor costs) were $1.0 billion, up 37.8% year over year. Tetra Tech’s revenues exceeded the consensus estimate of $974 million.
A. O. Smith Corporation’s (AOS - Free Report) fourth-quarter 2023 adjusted earnings of 97 cents per share surpassed the Zacks Consensus Estimate of 96 cents. The bottom line jumped 13% year over year, driven by the continued strong demand for residential water heaters in North America.
Net sales of $988.1 million narrowly missed the consensus estimate of $989 million. However, the top line increased 5.6% year over year.
Illinois Tool Works Inc. (ITW - Free Report) reported fourth-quarter 2023 adjusted earnings of $2.42 per share, which surpassed the Zacks Consensus Estimate of $2.40. Earnings increased 3.4% year over year.
The company’s revenues of $3.98 billion missed the consensus estimate of $4.01 billion. The top line inched up 0.3% year over year due to a favorable foreign currency translation of 1.2%. However, organic sales decreased 0.5% and divestitures reduced revenues by 0.4%.